The Supreme Court has set aside an order of the Orissa High Court which had rejected petitions filed by Mahanadi Coalfields Ltd. (MCL) under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award. The Supreme Court held that the High Court was wrong in treating Cuttack as the juridical seat of arbitration merely because the arbitral proceedings were conducted there.
A Bench comprising Justice Sanjay Kumar and Justice Sanjeev Sachdeva pronounced the judgment on September 23, 2026. The Court allowed MCL's appeal and restored the Section 34 petitions before the District Judge, Sundargarh.
Background
The dispute arose from a contract awarded by MCL for hiring heavy earth-moving machinery and carrying out excavation, transportation and allied work at its projects in Sundargarh. The agreement itself did not contain an arbitration clause. Subsequently, disputes arose over various claims.
In March 2019, the Orissa High Court appointed Justice M.M. Das (Retd.) as the sole arbitrator after the parties' dispute was referred to arbitration. The arbitration proceedings were conducted at Cuttack, and the arbitrator passed a common award in favour of GSCO on October 25, 2021. MCL thereafter filed three petitions under Section 34 before the District Court, Sundargarh, on December 8, 2021, seeking to set aside the award.
GSCO challenged the maintainability of those petitions, arguing that they were filed before a court lacking territorial jurisdiction and were also barred by limitation. The Orissa High Court accepted both objections and dismissed the petitions.On limitation, the Supreme Court noted that the arbitral award was passed on October 25, 2021, while the Section 34 petitions were filed on December 8, 2021. The respondent's counsel also conceded that the High Court's finding on limitation was erroneous.
The main issue concerned the territorial jurisdiction of the Sundargarh Court. The Supreme Court found that the contract specifically provided that disputes would be subject to the jurisdiction of the District Court where the work was executed. The work in question had been carried out in Sundargarh, and no Commercial Court had been established there at the relevant time.
The Court explained the difference between the legal seat of arbitration and the physical venue where hearings take place:
"There is a distinction between “seat” and “venue” of arbitration. While ‘Seat’ determines the Courts exercising supervisory jurisdiction over the arbitration proceedings, ‘Venue’ merely denoted the physical location where the sitting are held. In the absence of any express designation of Cuttack as the seat, the High Court clearly erred in treating the venue of the arbitration as the seat."
The Court further held that the fact that the Orissa High Court was located at Cuttack and had appointed the arbitrator did not, by itself, give courts at Cuttack exclusive jurisdiction over the Section 34 proceedings.
The Supreme Court allowed the appeal and set aside the Orissa High Court's June 20, 2025 order. It held that the finding that the Section 34 petitions before the District Judge, Sundargarh were not maintainable for want of jurisdiction and limitation could not be sustained.
The Court restored the Section 34 petitions to the file of the District Judge, Sundargarh and directed that they be decided in accordance with law expeditiously.
Case Details:
Case Title: Mahanadi Coalfields Ltd. & Ors. v. M/s GSCO (Gurmeet Singh and Company) Infrastructure Pvt. Ltd.
Case Number: Civil Appeal No. ..... of 2026 (@ SLP (C) No. 21375 of 2025)
Judges: Justice Sanjay Kumar and Justice Sanjeev Sachdeva
Decision Date: September 23, 2026
-300x169.webp)
-300x169.webp)
